Exorcising the Ghosts of 1994

Learning from Clinton's mistakes on health care reform:

This time, we want healthcare reform, by Ezra Klein, Commentary, LA Times: ...What a difference a decade makes. It wasn't so long ago that President Clinton's proposed [health care] reforms suffered a catastrophic defeat at the hands of moneyed interests and Republican opportunists, setting the stage for the Democratic Party's historic losses in the 1994 midterm elections. It was an enormous blow to ... the Democratic Party...

Such traumas leave scars, and for years afterward, Democrats ... shied away from fully reengaging the healthcare debate, even as the country's healthcare system continued its slow deterioration.

But the ghosts of 1994 have been largely exorcised from the Democratic psyche, and today, even the most hardened cynics are allowing themselves moments of hope. ... If Democrats are going to ... finally succeed, though, they are going to have to learn the lessons that 1994's failure can teach...

Everything that could go wrong did; everything that could be handled wrong was. Clinton decided to pursue the passage of NAFTA before healthcare reform, exhausting and angering his liberal allies (such as organized labor) immediately before he would most need their support and strength.

The initiative was placed under the control of Hillary Rodham Clinton and Ira Magaziner, whose primary health policy credentials came from a report on medical spending he'd written for the state of Rhode Island. Neither had the political experience to safely shepherd a reform of this magnitude, and it showed in their procedural missteps, which involved creating more than 30 closed-door task forces with more than 600 members but little to no representation from industry stakeholders such as the insurance industry or healthcare providers.

Worse, the Clinton administration was completely incoherent on how to handle those industry stakeholders and other interested parties, and thus it was unprepared to repel the all-out assault they mounted on the plan. ... There's a lot of money sloshing around, and quite a bit of profit to protect.

So, the first question for would-be reformers is how you handle the insurance industry, the pharmaceutical industry, the for-profit-hospital lobby and the businesses that don't want to begin offering comprehensive healthcare for their employees. And here, there is a choice to be made: Do you run over the industry interests that impede reform ..., or do you resign yourself to their involvement and invite them to the table?

In a classic worst-of-both-worlds compromise, Magaziner and Hillary Clinton did not initially include industry representatives in the process, but then constructed a plan whose famed complexity sprang mostly from their attempts to retain a place for these groups. Thus, they expected a certain degree of buy-in from the medical-industrial complex and were blindsided by the ferocious opposition they actually faced. Worse, their proposal didn't allow them to effectively counter the opposition. ...

And at the same time as the Clinton administration was floundering before the attacks ... (the insurance industry alone spent $50 million in ads, lobbying and organizing), the structural pressures pushing toward reform began to ease. As healthcare writer Matthew Holt has persuasively argued, President Clinton's initial mandate came in the context of the 1991-92 recession ... that left the middle class feeling particularly insecure...

But amid the lengthy dithering of the Clinton/Magaziner policy process, the recession lifted, the economy improved, the public's anxieties eased... Moreover, the promise of implementing managed care left the right with an alternative policy to organize around, one that didn't require government intervention or obvious turbulence.

Today, of course, it's clear that managed care has failed. After cost growth was effectively arrested in the mid-1990s, patients rebelled against being managed, and insurers decided that passing on the costs ... was less trouble than holding them down. Moreover, ... anxieties over spending growth and the precariousness of coverage ... are now constant companions, even in periods of economic expansion. ...

That may be why a recent New York Times/CBS poll found that 90% of Americans said they thought that the healthcare system needed either "fundamental changes" or to be "completely rebuilt." The last time the poll recorded such desire for reform was in January 1994. Indeed, according to the poll, 62% report themselves willing to pay higher taxes for universal coverage.

Such numbers have appeared before, and efforts at reform have failed before. There are differences this time, though. No change-minded president would be so naive about industry opposition, or slow to propose a plan, or secretive about its creation. The pressures that eased after the 1990-91 recession are now enduring.

The progressive coalition is much more mature and effective ..., and it aches to engage ... in a debate about how to best run the American healthcare system. Most telling of all, the American people regret passing up the Clinton plan. A 2005 ... poll found that 53% of respondents ... believe that they'd be better off had the Clinton plan passed, while only 28% believe that they'd be worse off. It may be that ghosts of the Clinton plan's failure have ceased scaring Democratic politicians and begun haunting voters, leaving them afraid not of change but of its absence.

Will it happen, or is reform politically impossible? If business comes solidly aboard I think there's a chance even if the medical industrial complex fights the effort vigorously. In any case, reform will depend upon the ability of the next president to build an effective coalition, a difficult task since serious reform will come at someone's expense and hence bring strong opposition from some groups.

There are signs that firms are realizing participating in reform is better than potentially having it forced upon them, so it's partly a matter of the type of reform business is willing to support and whether that will lead to a unified reform effort, or the splintered politics of the past that has blocked substantial change.

If anyone cares to weigh in, I'd be curious to hear how you see the current slate of presidential candidates in this regard, i.e. their ability to design an effective health care reform plan, and to forge the necessary coalition to put it into place, or any other thoughts you might have on the more general topic of what will be required to bring about major health care reform.

Comments

[evagrius]

As long as health care is seen as an opportunity "center" for profit, it won't matter what type of reform is initiated. It will fail.

Health care should not have profit as its raison d'etre, period.

Yes, costs must be considered, wages for providers from bottom to top must be considered, investments for research considered.

But all that can be done without having to compensate certain individuals with huge income or investors with huge returns. That approach rewards parasites and rsults in waste and fraud.

[real person from the real world]

evagrius: Health care should not have profit as its raison d'etre, period.

When I have said this, no one listened. I hope you have better luck. I was dumped from a managed care provider (my former State University!!!!). I went to a local "non-profit" hospital for care for heart arrythmia that I could not tough out, after 3 days, and told them upfront, I wanted to limit costs because I had no income at the time (I was taking classes for IT), but thought I refused tests, they padded the bill mercilously, and then sent an agressive attorney after me, even though I was trying to pay. (They cleverly split the bill up so many ways, they could insist I was not paying on something else.... you had to depend on them to combine it). On top of it, I was slightly over their limit for "charity" due to a ROTH IRA roll over (not real income) from a couple of years previously. I owned a home with a lot of equity.... so they figured I would get a sub-prime loan! When I was younger, I was aginst Clinton's reforms, now I say, SINGLE PAYER is the way to go. I have been screwed and I see the light.

[robertdfeinman]

The head of United Health Care got a pay package worth $1.1 BILLION. With this type of money floating around how likely is it that the insurance industry will allow itself to be removed from the picture?

It is generally estimated that middlemen consume 30% of all health spending dollars. The US has never (with the exception of Prohibition) eliminated a profitable industry sector. Look, tobacco is still be sold 50 years after the Surgeon General's report.

With one million people involved in the industry what politician is going to risk the backlash from cutting them out of the picture? Whatever patch gets applied it will continue to be inefficient and overly expensive even if it manages to cover more people.

[Bruce Webb]

Excellent historical analysis by Ezra and good commentary from Mark and Evagrius so let me just throw in my usual twist.

Single-payer has been doomed because the Cato style economic Right has successfully tied it back to its "Big Government is not the Solution, Big Government is the Problem" message. No amount of economic analysis showing that once adjusted for cost and range of people covered outcomes in the Canadian and French systems were objectively better for the large majority could break through that simple message.

Social Security was never in serious danger, the fact is that Baker & Weisbrot's fundamental point in Social Security: the Phony Crisis was never successfully challenged. But it served its purpose for the Economic Right on two fronts. First it allowed them to make the fiscal case that we simply could not afford new social spending in the face of the uncoming challenge and it allowed them to make the policy case that collective solutions were always inferior to private ones.

Social Security solvency fatally undermines both cases. If the American people could ever be convinced that the only fully funded hugely efficient government program out there is in fact the traditional whipping boy of the Economic Right there is a huge political opening to push Single Payer through.

In an act of political jiu-jitsu it would allow Single Payer advocates to push two messages of their own. One, 'Big Government can work, look at Social Security'. And two, and a little more profound, and reinforced every day in news coming out of Washington, 'They were lying to you on Social Security just as they lied on everything else'. All of a sudden they are the ones pushing the rock up the hill.

There is a lot of current discussion about the extra-ordinary drop off in productivity post 2004. Over at Beat the Press I suggested this might be a matter of actual manipulation of the number. Dean was skeptical. Okay but we KNOW that the Bush Administration deliberately used a bad number in advancing Medicare Part D. We KNOW that a young political ideologue rewrote the numbers at NASA. Go down the list: NIH, Dept of Interior and now and most strikingly at the Department of Justice. And lets not even get started on Iraq.

The Productivity series has been extraordinarily erratic since Q4 2005. I have yet to see a convincing argument as to why and more particularly how we overnight went from a growth rate averaging just under 3.0% to one averaging 1.5%. Sure people advance arguments with housing being the most plausible, but somehow the effects don't seem to be showing up anywhere else. Of particular note is that wages are holding up remarkably well, as is the Dow.

There is a paradox in play here. Social Security receipts, a pretty good proxy for wages are coming in ahead of projections. Yet productivity is reported at only 75% of projections. Logically the result should be a squeeze on profits and downward pressure on the Dow.

The Secretary of Labor Elaine Chao is married to Senator Mitch McConnell. She is political to the core. And while I have not yet checked her senior political staff you can bet they were selected for loyalty to Bush policies. In all agencies the apparent message is that being a "loyal bushie" is more important than allowing honest work product to leave your shop. My gosh when you get the GSA involved in promoting partisan political interests and show every sign of wanting to turn US Attorney's offices into annexes of the Republican National Committee you have to be pretty naive to imagine that the Bureau of Labor Statistics is immune from pressure from the politicos above them.

In Q4 2005 we had a rather shocking drop in productivity to 0.0%. In Q4 2006 we had a preliminary number, fully reported on the BLS website of 3.0%, while the final number was 1.6%. That is a lot of revision. In 2005 that shocking drop was exactly enough to rescue Intermediate Cost. Want to bet the 2006 drop has the same effect?

Look even paranoids have real enemies. The Social Security Report, after years of being released right on deadline, was delayed in 2006 and now again in 2007. The head of Cato's Social Security project, which is to say the High Priest of privatization has been recess appointed as Deputy Commissioner at the Social Security Administration. Andy Biggs, a man whose career was been devoted to privatization is now in charge of daily operations at SSA. The fox is officially in charge of the henhouse.

As economists it is probably a little heretical to suggest that your basic statistical tools could be manipulated for pure partisan gain. But there is nothing in the track record of this Administration to argue that they wouldn't do it if they could get away with it.

Productivity is a derived number ultimately arising from a combination of surveys. It would be relatively trivial to manipulate it. What would be harder would be to fool with the numbers at the Bureau of Public Debt. It is a matter of public record how much debt is being sold and redeemed and these funds are tracked and reported literally to the penny. They are very difficult to reconcile with recent productivity numbers. Recent productivity numbers have been very convenient for preserving Bush's most important domestic policy proposal. I may be totally wrong to draw a line from A to B and conclude C. Wrong maybe but not crazy.

The road to Single Payer runs through universal understanding that the Social Security system is working well as is. Which argues for opponents of Single Payer to prevent that universal understanding for as long as possible. Popping Andy Biggs into SSA at this juncture simply screams damage control and message management.

[Bruce Webb]

"The US has never (with the exception of Prohibition) eliminated a profitable industry sector."

Prohibition actually enhanced that industry sector and created huge payoffs for politicians to boot.

But to the point. People tend to talk about the medical industry as if it were structurally identical with the overall military/industrial complex. In reality its various components are at war, you don't even have to divide and conquer. Take the two constituencies most removed from direct care which is to say hospital administrators and the insurance companies. Their own personal financial interest are diametrically opposed. Every minute a doctor or nurse or claims clerk spends talking to the insurance company is a minute not spent performing a lucrative procedure. Depending on payment levels Single Payer could be a huge boost to the bottom line of Hospitals and Clinics and for that matter single practice. I don't see how their economic interests align with those of the insurance companies at all. The key is to take Health Care Reform writ large in two phases. In phase one we cut the insurance companies out of the picture and expand coverage. In phase two you tackle cost containment.

Yeah it might mean tolerating that billion dollar compensation package for a while, the New New Deal is not going to come overnight, this is a multi-decade project.

[save_the_rustbelt]

Reform is possible.

Single payer is not, and would be a mess anyway.

Tell an American to wait 8 weeks for an MRI for a blown knee, there will be hell to pay in some Congressman's office.

[Bruce Wilder]

Health care reform needs Whigs.

The genius of Anglo-American politics, historically, was whiggery, the paranoid conception of politics, which had its origins among English Protestants convinced that popish plots to restore an absolute monarch lay behind every exercise of royal authority. That paranoid outlook prepared the mind to advocate smallish political measures with outsized principles, the combination of which resulted in almost inexorable progress, with only the occasional threat of violent revolution.

For a hundred years, health care has been evolving into the dysfunctional behemoth, which now rivals the military-industrial complex in the threat it poses to American civilization. And, every reform and innovation has just made the situation worse and worse.

The greatest obstacle to reform, now, is now not the inevitable opposition of interested parties -- although that has grown only more formidable as the industry has claimed an ever-larger percentage of the economy -- it is the conceptual difficulty of "designing" 15% of the economy. Ezra complains about the complexity of Hillary's proposal and the numerous task forces. But, really, how could a thorough-going reform not be enormously complicated?

My own mind is inclined to believe in the value of small-in-scope (relative to the totality of reform) but subversive interventions. A catastrophic reinsurance scheme, that would reduce the incentives insurance companies have to deny coverage to the sickest, but would also gradually erode the basis for private insurance altogether. A centralized medical records scheme, that would protect privacy, but reduce medical errors, and that, also, would create an informational base for performance management and population health studies. An expansion of medical education, which would increase the availability of doctors and other professionals, and, also, in the long run put significant downward pressure on doctors' inflated incomes and fees.

It may be that we are approaching a crisis -- a moment ripe for political revolution. The long punishment of Bush's Presidency is having an effect. The Democratic Congress is in training, learning to wield political power without corrupt "bipartisanship" undermining every initiative. Apparently, the Republican Party does not plan to even offer a serious Presidential candidate in 08. 2009 may well be a brief, but heady moment of Democratic and Progressive triumph, and relief from stupid reactionary politics, a Camelot moment when Great Reforms are possible. I just hope we are ready with reforms designed to evolve in a positive direction over a longer period.

[calmo]

And how was it that we can stand Ezra here:And here, there is a choice to be made: Do you run over the industry interests that impede reform ..., or do you resign yourself to their involvement and invite them to the table? and this conciliatory attitude that 30% stakeholders (the train robbers in this great railway expedition) need to considered? Why should we call this "reform" an impediment to public interests again?
(Did we have the same invitation to the GM workers or the air traffic controllers or was it a little less "invitational"?)
Could be Clinton's popularity did not extend to the press/media where the health care industry was willing and able to spend millions shaping opinion and apparently, even Ezra's.

[Emma Zahn]

The simplest model to use is what many, many people are already familiar with: Medicare for basic coverage; private insurers for supplemental; anything left is covered by individual.

This is what most seniors I know have. They and at least one of their children know how it works. It may not be perfect but it is a good place to begin the conversation.

[Jim Harrison]

The odd thing about our current system is that many ininsured people aren't indigent. If they can get insurance at all, they just can't get it at a price they can afford. So they don't pay anything until they get sick. A universal insurance scheme will require them to pay for coverage, and you can be sure that may of them will be mighty unhappy about that. The rightists are sure to make hay about that. Indeed, I think some of the supporters of the California and Massachusetts plans, which mandate that everyone have health insurance the way that every driver is required to have car insurance, are proposing their version of heath care reform cynically as a way of making middling people afraid of universal care.

[Robert]

When I was younger, I was aginst Clinton's reforms, now I say, SINGLE PAYER is the way to go. I have been screwed and I see the light.

Ditto. I have not been screwed but I have seen the light.

If they can get insurance at all, they just can't get it at a price they can afford.

I am not indigent, but I cannot get even high deductable health insurance. I chose my parents poorly. If my state did did not have a decent high risk pool, I would be forced back into W-2 employment.

The current system slices the risk pool such that the genetically unlucky are unable to get even catastrophic coverage as individuals. I would be happy with an affordable plan with a $20K dedectable for me and my wife. Not available. The abiding charm of single payer is that we can join a reasonable risk pool.

[Jim Harrison]

I hope it was clear that I favor a single payer system or something equivalent. I'm in Robert's position myself and have a huge personal stake in being able to buy affordable insurance, even if it comes with a substantial deductable.
What worries me and inspired my comment is the fear that some of the uninsured, especially the younger ones, are going to freak out when they realize that reform means they will have to pay.

[BiJian Feng]

When it's all said and done, the fact remains that health care is a cost that someone has to pay for. If you can't afford the health care you need, someone else has to pick up the tab; there ain't no free lunch.

What needs to be answered are two key questions. What is the most efficient way of delivering health care to the masses and how are the costs going to be distributed?

In regards to the first question, I have no faith that a government run health care program will be more efficient and cost effective than the current system we have now. The problem is how to limit health care services so that they are used only when necessary. Basic economics tells us that once you lower the cost of a good like health care, the demand for it will increase, and if you make it "free", then the demand will become nearly infinite and other methods of rationing will arise, such as lines and waiting lists, etc. Who is going to decide what procedures are necessary? For example, should a 78-year old man in bad health be given hip replacement surgery when he can function without it, yet must live in discomfort? Right now, with a PPO, he has to bear a least some of the costs and might decide it's not worth $6000 for a new hip or it's so painful that it's worth the cost. You need to have costs in order to do a cost-benefit analysis and the individual involved is the best person to make that decision. I think that there's no way that any system which guarantees universal "free" health care would reduce our total health care spending, rather total spending would skyrocket. I'd like to hear proposals on how to address this problem.

As to the second question, obviously the healthy and rich would bear the brunt of the costs, but to what extent? We have to figure out how much more universal health care would cost in order to make a fair assessment on the amount of new taxes that would be needed.

I see that there's a lot of anger over profits, but profits are the driving force behind innovation. It's a system that has worked well and has delivered countless miracle drugs. The companies that invent these drugs get a patent for a number of years, then they go generic forever benefiting all humanity. Without the profit motive, the drugs that some people complain are too expensive would never have been invented in the first place, or would have taken much longer to reach market. I think the current patent system offers a good balance, just look at all the generics available today that we take for granted!

[evagrius]

BiJian Feng;

Never mind the theory.

Please describe how 47 million plus Americans can receive regular ongoing health care, ( I'm not discussing "emergency care" but regular ongoing health care).
Please describe how pregnant women can receive pre-natal care.
Please desribe how children can receive regular health care.

Please describe it without resort to chimera.

[save_the-rustbelt]

I put a post on Angry Bear this morning on a clsoely related topic, feel free to surf on over.

(Angry Bear is on Marks's blog list to the right.)

[evagrius]

save_the-rustbelt;

I hope you realize that uninsured Americans are already making the "sacrifice" you claim Americans don't want to make.

I worked in a health clinic, interviewing people for Medicaid eligibility. Chronically ill indigents don't have the luxury of demanding on-the-spot medical care. They go for years without regular care, obtaining just the quick fix of emergency care.

Sorry but your argument is fallacious in the extreme.

[save_the_rustbelt]

Ev:

Well, about 250 million Americans do have coverage or can afford self-coverage, so why is my argument fallacious?

Will the 250 sacrifice willingly for the 45 million? That is a legitimate question.

[anne]

As always with Republicans questions are nonsense rather than legitimate. We are directly sacrificiing to the extent of spending $14 billion a month directly on the insane tragedy of occupying Iraq. Leave Iraq immediately, and use that to insure the health of tens of millions of Americans. There is a sacrifice that is no sacrifice other than evidently for a Republican.

[anne]

The Republican fear machine on health is always rationing rationing rationing, as though there were no rationing for tens of millions now and as though there is any need for rationing. But, no matter, there is always Iraq to keep us focused on everything but health care.

[evagrius]

save_the_rustbelt;

Actually, many don't have "full coverage". It all depends on their policy, right?

You're asking a bizarrely cynical question.

Perhaps you should but asking the question points to a crisis in the culture.

[save_the_rustbelt]

Ev:

I'm just asking a question on the AARP premise - if you think it is a bad premise say so, if you want the question rephrased say that.

Do you think the CEO of AARP has any credibility to make that statement? Are both the NYT and CBS staffed by cynics and/or Republicans?

Anne:

You are getting very tiresome with your Iraq rants and your Republican rants. Do you have anything useful to say about healthcare?

[anne]

Yes; I say we leave Iraq immediately and use the $14 billion a month we save directly to expand health care coverage for tens of millions of Americans lacking in coverage, not to mention beginning a federal-state revenue sharing plan for a dramatic reduction in tuition at public colleges and universities.

Am I being expertly tiresome enough, not really being an expert really but I am practiced at being tiresome at Republican destructiveness, really, expertly, almost?

[anne]

Suppose we simply continue private insurance, and wonder at a saving of $14 billion a month from the needless destruction in Iraq how many Americans that might $14 insure. We could say offer employers government subsidies for catastrophe health care coverage. Interesting idea. Sort of like the health care plan of John Kerry that Republicans ridiculed so, being Republicans that is and liking to ridicule so, like.

Shall we describe the health care plan of John Edwards, instead?

Am I being tiresome enough?

[anne]

http://economistsview.typepad.com/economistsview/2007/02/paul_krugman_ed.html

February 9, 2007

Paul Krugman: Edwards Gets It Right
Edited by Mark Thoma

Paul Krugman is relatively upbeat as he spots a flickering of light at the end of the long, long tunnel to health care reform:

NY Times: What a difference two years makes! At this point in 2005, the only question seemed to be how much of America’s social insurance system — the triumvirate of Social Security, Medicare and Medicaid — the Bush administration would manage to dismantle. Now almost all prominent Democrats and quite a few Republicans pay at least lip service to calls for a major expansion of social insurance, in the form of universal health care.

But fine words, by themselves, mean nothing. Remember “compassionate conservatism?” I won’t trust presidential candidates on health care unless they provide ... specifics... And former Senator John Edwards has just set a fine example....

[Remember....]

[Jim Harrison]

I haven't been able to get health insurance for some twenty years because of preexisting conditions. I've been fortunate that I haven't had to spend a lot of money on medical care during that period. In fact, if I had been paying reasonable premiums for coverage, the insurance carrier would be sitting on a considerable surplus from me.

Insuring the uninsured will surely cost more overall, but the newly insured will be contributing fresh money to the system.

[anne]

Ah, thank you for reminding me that it is essential that insurance companies be prevented from discriminating against and denying coverage because of pre-existing conditions; even going so far as to cancel coverage for persons who were found to have a pre-existing problem that neither the persons nor the insurer were initially aware of.

[anne]

Also, by the way, simply looking to the pay of chief executive officers of health insurers shows how vastly profitable the industry is. Notice compensation for just the leading 5 executives:

http://www.aflcio.org/corporatewatch/paywatch/db_console_r.cfm?f=0&ind=Insurance%20Health%20%26%20Disability

Insurance: Health & Disability

William W. McGuire
Chief Executive Officer
UnitedHealth Group Incorporated

In 2005, William W. McGuire raked in $37,665,645 in total compensation including stock option grants from UnitedHealth Group Incorporated.

And William W. McGuire has another $1,776,547,635 in unexercised stock options from previous years.

....

John W. Rowe
Chief Executive Officer
Aetna Inc.

In 2005, John W. Rowe raked in $17,709,543 in total compensation including stock option grants from Aetna Inc..

From previous years' stock option grants, the Aetna Inc. executive cashed out $27,367,351 in stock option exercises.

And John W. Rowe has another $265,503,766 in unexercised stock options from previous years.

....

H. Edward Hanway
Chief Executive Officer
CIGNA Corporation

In 2005, H. Edward Hanway raked in $16,998,300 in total compensation including stock option grants from CIGNA Corporation.

From previous years' stock option grants, the CIGNA Corporation executive cashed out $16,447,500 in stock option exercises.

And H. Edward Hanway has another $28,881,000 in unexercised stock options from previous years.

....

Larry C. Glasscock
Chief Executive Officer
WellPoint Inc.

In 2005, Larry C. Glasscock raked in $16,277,139 in total compensation including stock option grants from WellPoint Inc..

And Larry C. Glasscock has another $55,936,000 in unexercised stock options from previous years.

....

Daniel P. Amos
Chief Executive Officer
AFLAC Incorporated

In 2005, Daniel P. Amos raked in $12,806,251 in total compensation including stock option grants from AFLAC Incorporated.

From previous years' stock option grants, the AFLAC Incorporated executive cashed out $24,011,800 in stock option exercises.

And Daniel P. Amos has another $110,915,022 in unexercised stock options from previous years.

....

[anne]

About 12 executives at UnitedHealth accounted for an astounding $2.4 billion in options grants in 2005. [I not about 12, for I have not been able to find whether the number is 11 or 12.] Tradeoffs in how profitable profitable must be, as in how much public spending should be devoted to health care simply have to be looked to at some point. We can afford far broader health care coverage, but is there the political determination?

For me, I find John Edwards plan a terrific beginning.

[anne]

http://select.nytimes.com/2007/02/09/opinion/09krugman.html

February 9, 2007

Edwards Gets It Right
By PAUL KRUGMAN

At first glance, the Edwards health care plan looks similar to several other proposals out there, including one recently unveiled by Arnold Schwarzenegger in California. But a closer look reveals extra features in the Edwards plan that take it a lot closer to what the country really needs.

Like Mr. Schwarzenegger, Mr. Edwards sets out to cover the uninsured with a combination of regulation and financial aid. Right now, many people are uninsured because, as the Edwards press release puts it, insurance companies “game the system to cover only healthy people.” So the Edwards plan, like Schwarzenegger’s, imposes “community rating” on insurers, basically requiring them to sell insurance to everyone at the same price.

Many other people are uninsured because they simply can’t afford the cost. So the Edwards plan, again like other proposals, offers financial aid to help lower-income families buy insurance. To pay for this aid, he proposes rolling back tax cuts for households with incomes over $200,000 a year.

Finally, some people try to save money by going without coverage, so if they get sick they end up in emergency rooms at public expense. Like other plans, the Edwards plan would “require all American residents to get insurance,” and would require that all employers either provide insurance to their workers or pay a percentage of their payrolls into a government fund used to buy insurance.

But Mr. Edwards goes two steps further.

People who don’t get insurance from their employers wouldn’t have to deal individually with insurance companies: they’d purchase insurance through “Health Markets”: government-run bodies negotiating with insurance companies on the public’s behalf. People would, in effect, be buying insurance from the government, with only the business of paying medical bills — not the function of granting insurance in the first place — outsourced to private insurers.

Why is this such a good idea? As the Edwards press release points out, marketing and underwriting — the process of screening out high-risk clients — are responsible for two-thirds of insurance companies’ overhead. With insurers selling to government-run Health Markets, not directly to individuals, most of these expenses should go away, making insurance considerably cheaper.

Better still, “Health Markets,” the press release says, “will offer a choice between private insurers and a public insurance plan modeled after Medicare.” This would offer a crucial degree of competition. The public insurance plan would almost certainly be cheaper than anything the private sector offers right now — after all, Medicare has very low overhead. Private insurers would either have to match the public plan’s low premiums, or lose the competition....

[bob]

I like Bruce Webb’s analysis. Most US doctors are sick of dishonest insurers who advertise one thing and deliver another. However, the cost of universal care will be enormous even if we can cut out the insurers (I hope that we can). I’m worried that cost estimates for the Mass plan, which starts this summer, are too low and that the plan will have real pains.
Modern healthcare is much better than 1957 healthcare but is very expensive. Consider the two big hormone related cancers- breast and prostate. At least 10% of women will get breast Ca if they live long enough, almost as many men (even more w clinically insignificant cancer at autopsy, which we can ignore). Mammograms and the blood PSA test are good but imperfect; mammography involves radiation exposure. Quite a few Americans of appropriate age are not getting mammo or PSA. Now we hear that MRI of the breast has real advantages (I believe it) and should be done in addition to mammo in high risk cases. This is expensive; it would be best if images were sent to a central center for interpretation. Something analogous is coming for prostate cancer- instead of or in addition to doing multiple biopsies of the thousands with high PSA, fancy imaging would help (but at price). The NY Times yesterday had a story of a man with acute MI fixed up at Brigham & Woman’s w angioplasty. No more than 25% of Americans. w/wo insurance can get angioplasty in 2 hrs after arrival at ER: few ERs are open, those that are, like my hospital, are swamped with car crashes, shootings, every kind of problem- sometimes MI patient isn’t recognized for 4-6 hours. How to get early attention? It takes money. Hospitals have been closing ERs because they lose money and bring lawsuit exposure.

Forget about covering designer drugs for end stage cancer, we don't provide ground level care and the cost of providing it will be huge. Yes, get all troops out of Iraq (Anne) and we can do it but not if we then invade elsewhere. Most politicians just don’t understand the cost of universal coverage and promise everything to everybody. It will be a big and prolonged fight, but it can make a difference. Keep your eyes on Mass

[anne]

Yes; the possible costs in Massachusetts are worrying, and need to be closely watched. I was sent a Blue Cross/Blue Shield single middle-aged person sample plan a few days ago that costs $590 a month with deductions and co-pays for seemingly all services or products beyond flu or pneumonia shots.

[anne]

Bob's fine reference:

http://www.nytimes.com/2007/04/08/health/08heart.html?ex=1333684800&en=9992c1d2cf694940&ei=5090&partner=rssuserland&emc=rss

April 8, 2007

Lessons of Heart Disease, Learned and Ignored
By GINA KOLATA

Keith Orr thought he would surprise his doctor when he came for a checkup.

His doctor had told him to have a weight-loss operation to reduce the amount of food his stomach could hold, worried because Mr. Orr, at 6 feet 2 inches, weighed 278 pounds. He also had a blood sugar level so high he was on the verge of diabetes and a strong family history of early death from heart attacks. And Mr. Orr, who is 44, had already had a heart attack in 1998 when he was 35.

But Mr. Orr had a secret plan. He had been quietly dieting and exercising for four months and lost 45 pounds. He envisioned himself proudly telling his doctor what he had done, sure his tests would show a huge drop in his blood sugar and cholesterol levels. He planned to confess that he had also stopped taking all of his prescription drugs for his heart disease.

After all, he reasoned, with his improved diet and exercise, he no longer needed the drugs. And, anyway, he had never taken his medications regularly, so stopping altogether would not make much difference, he decided.

But the surprise was not what Mr. Orr had anticipated....

[BiJian Feng]

anne says...

Yes; the possible costs in Massachusetts are worrying, and need to be closely watched. I was sent a Blue Cross/Blue Shield single middle-aged person sample plan a few days ago that costs $590 a month with deductions and co-pays for seemingly all services or products beyond flu or pneumonia shots.

Like I said Anne, someone has to pay the costs for health care; there truly is no free lunch. If you're not willing to pay your fair share to subsidize those who can't afford it, then why do you advocate that others should?

Private health services are necessary because they have to compete with one another. Competition is the linchpin that drives companies to lower costs and provide better service. You understand how hard it is to get the government to change an ineffective policy or foolish rule don't you? Yet companies are changing their plans all the time to better fit the needs of their customers. That's why you have all the different PPO's, HMO's, and other various plans to choose from. Could the government be so innovative and mobile? Any new health care initiative must use the private sector.

[evagrius]

BiJian Feng ;

Your logic is faulty, very faulty. What's the incentive? Lower cost or more effective treatment? Profit or health?

For your argument to work, effective treatment equals profit and treatment.

But profit always trumps treatment. If the treatment doesn't work, do the payers get their money back?

[BiJian Feng]

Yes, the drive for profit creates efficiency. The drive for profit also creates more effective treatment methods. Health care is like other services or products. The better the service or product, the more likely a person is going to choose that firm vs. another firm. This is the beauty of capitalism. Capitalism relies on our human nature and transforms it into something that benefits all of us. All we have to do is be ourselves and act in our own best interests. Likewise, a firm that offers a faulty product or treatment that doesn't work will soon go out of business do to word-of-mouth and dissatisfied customers. Try opening up a coffee shop by Starbucks and offer coffee made from used coffee grounds to save money. You'll go out of business. You can try to make as much profit as possible, but you must also please the customer because he doesn't have to buy! We all act in our interests and it all works out.

[evagrius]

BiJian Feng

We all act in our interests and it all works out.

Yes, Dr Pangloss.

[reason]

As I see it there is a way to bring in a single payer system without resistance from the existing lobby - simply create a parallel system and run it well. Have a default system that people can opt in to. People can have their private system if they want, but then it will cost them more and may not be there for them when they need it (because it is tied to a job, or because of adverse selection issues). Start small (with children under 10 for instance) and let elegibability criteria gradually be expanded. Pay for it with a specific (optional) tax.

You could even invite the private funds to participate in the scheme, provided they satisfied certain defined benefit and eligability rules. (This is modelled somewhat on what happens in Germany - not my ideal scheme, but as a model for reform in the US probably a practical compromise).